Housing bust derails path to assisted living for some

When her 86-year-old mother, a retired nurse with Alzheimer's disease, started wandering away from her Tallahassee, Fla., home in 2007, LuMarie Polivka-West knew it was time to move her mother and her 94-year-old father into an assisted-living facility.

But because of the collapse in the real estate market, she couldn't sell her parents' house quickly to pay for a $3,200-per-month assisted-living apartment. For another year, while waiting for the house to sell, Polivka-West and her two brothers each contributed $600 a month to help their parents afford the assisted-living unit.

"It was a significant cost to me and my brothers," said Polivka-West, the senior director of policy at the Florida Health Care Association, a nursing home trade group. As for her parents, "It didn't cause them anxiety, just us," she said. "We didn't let them know."

In the fourth year of a depressed real estate market, experts say thousands of people remain unable to move into senior housing because they can't sell their homes quickly or for the prices they need. The upshot: greater pressure on families to pay for parents' and grandparents' placements, or to take over the care themselves.

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"We see people coming in much older and frailer because they're taking a longer time to make the decision," said Donna Taylor, the executive vice president for the nonprofit Arizona Baptist Retirement Centers in Phoenix, a continuing care retirement community. "They don't know how long it will take to sell their house, and in some cases they're reluctant to sell because of the lower price."

The squeeze on families is hurting occupancy rates at many senior housing communities. Nationally, the occupancy rate for continuing care retirement communities fell from 94.4 percent in the first quarter of 2007 to 89.5 percent in the first quarter of this year, according to the National Investment Center for the Seniors Housing & Care Industry, a senior housing trade group. Occupancy rates for assisted living facilities fell from 90.6 percent to 88.4 percent, and for independent-living facilities from 92.7 percent to 87.7 percent. The decreases tracked the decline in home prices.

Senior housing complexes have responded by trying to entice seniors to go ahead with their moves. Some facilities are buying people's houses, freezing prices and offering move-in discounts.

Senior housing comes in various sizes and shapes. Continuing care retirement communities typically charge entrance fees that average $253,000 plus average monthly fees of $2,600. Standalone assisted living facilities don't have entrance fees but charge $3,000 to $8,000 a month in rent, depending on how many services are provided. Independent-living units with housekeeping, meals and other services average about $2,500 a month.

"Often, people's largest asset is their house, and to the extent the house isn't selling or it's selling for less, that naturally puts pressure on the ability of seniors to move into retirement communities," says Michael Hargrave, a vice president at the National Investment Center for the Seniors Housing & Care Industry. "When it takes a year to 18 months to sell a house, that's a deterrent."

Taylor recalls a woman who was on the verge of moving her elderly father, who had Parkinson's disease, into an independent-living apartment, with services to help him with mobility and daily activities, at an Arizona Baptist facility in Phoenix. But then the woman's parents decided to move into a regular apartment with no services, for 40 percent less money, because they'd sold their home for significantly less than they'd anticipated. The daughter told Taylor she was sick with worry about her parents living on their own in that apartment.

In Florida alone, Polivka-West estimates that there are 400,000 seniors with dementia living on their own at home, with few or no services. "The U.S. has a large aging population and we do not have a long-term care plan for this country," she frets.

Since 2008, Brookdale Senior Living, which is based in Brentwood, Tenn., and operates 13 continuing care retirement communities around the country, has signed contracts with seniors promising to buy their houses at predetermined prices, based on independent appraisals, within eight months if they can't sell them. Brookdale has entered into about 400 of these deals, but it's had to buy fewer than 100 homes, most of which have been resold, said Chris Bird, a Brookdale vice president.

"The biggest sticking point is getting people to understand that their home isn't valued at what it was when the market was at its peak in 2007," Bird said. "I've been in this business for over 15 years and I've never seen people wait this long to make a decision to move in."

(Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization that isn't affiliated with Kaiser Permanente.)